New Employment Regulation during Martial Law

On 15 March 2022 the Ukrainian Parliament adopted a new Law “On Arrangement of Labor Relations during Martial Law” (the “Law”). The Law has been signed by the President of Ukraine and becomes effective on 24 March 2022. The Law regulates labor relations between employers and employees, provides for more opportunities for employers towards engagement and dismissal of employees during martial law, which the government views as part of the combined effort against the Russian invasion.

The key new elements provided by the Law are the following:

Specifics for the Execution of an Employment Agreement

• The parties can mutually determine the form of the employment agreement, thus a written form is not required.
• The probation period may be established for any category of employees without any restrictions provided by the Labor Code.
• Employers are able to conclude fixed-term employment agreements with new employees for the period of martial law or for the period of replacement of a temporarily absent employee.

Transfer of Employees to Another Job and Change of Essential Terms of Employment

• An employee can be transferred to another job (position) for the period of martial law without his/her consent (although an employee may not be relocated to an area where active war actions exist) provided that such a new job does not result in negative consequences to the employee’s health, and if the transfer is required to prevent or eliminate the consequences of military actions or other health or life-threatening circumstances.
• An employer may change essential terms of employment without giving an employee two months’ notice.

Specifics of Employment Termination During Martial Law

• An employee may terminate the employment on his/her own initiative without the standard two weeks’ prior notice if the territory where the company-employer is located is under hostilities, and the employee’s life and health are in danger (except for employees engaged in social benefit activities during martial law or at critical infrastructure locations).
• An employee may be dismissed during his/her temporary disability or vacation (except for maternity and parental leave) based on the employer’s initiative.

Specifics of Establishment and Recording of Working Time and Time Off

• During martial law the normal maximum working time per week is increased to 60 hours (instead of 40 hours); for employees who had a right to a decreased working time the maximum working time per week is increased to 50 hours.
• The duration of weekly uninterrupted time off may be reduced to 24 hours.
• The start and end of a working day is established by the employer, whereas the duration of the working week (five or six days) is determined by the employer based on the decision of the relevant military management and military administrations (in the case of their establishment).
• The shortened working time on any day preceding a holiday, days-off and weekends is not applicable; overtime limitations, regulations prohibiting working on holidays, days-off and weekends, provisions providing a form of compensation for the work on a day-off, etc. should not apply.

Night Working Hours and Work Regime for Certain Employees

• The use of women’s labor (except for pregnant women and women with a child younger than one year) in heavy work and work with harmful or dangerous working conditions, as well as underground work, shall be allowed solely upon their prior consent.
• The labor of pregnant women, women with a child of under one, disabled women shall not be allowed during night hours without their prior consent during martial law.
• Employees with children (except for pregnant women and women with a child of under one) may be engaged in working during night hours and overtime, work at weekends, on days off and public holidays, and may be sent on business trips with their prior consent.

Remuneration Payments

• If remuneration cannot be paid on time to an employee due to ongoing military actions, the payment of remuneration may be suspended until the employer resumes its core business activity.
• The Law specifies that the employer shall be exempt from any liability for violating the terms of remuneration payments provided that there is evidence that this violation was caused by military actions or force majeure.

Collective Bargaining Agreement

• During the time of martial law being in effect, certain provisions of the collective bargaining agreement may be suspended upon the employer’s initiative.

Leave

• Employees are entitled to annual basic paid leave with a duration of 24 calendar days. An employer may refuse to provide an employee with leave (except for pregnancy and maternity leave), if such an employee is engaged in critical infrastructure works. Unpaid leave may be provided without any time limitations.

Suspension of Employment Agreements

• The Law has introduced a new concept of suspension of employment agreements. The Law sets out that an employment agreement may be suspended if it is impossible to provide the employee with work or to perform the work is impossible. However, suspension of the employment agreement does not result in termination of employer-employee relations.
• Under the Law the aggressor-state shall be responsible for compensating the employer for salaries and other normally-guaranteed amounts paid during the period when the agreement is suspended. At the same time the Law does not provide for the mechanism of how this compensation will be implemented.

The Law shall be effective during the whole period of martial law until its termination or cancellation, except for the provisions regulating the suspension of labor relations which shall be effective until the moment the full amount of the remuneration due to employees is compensated by the aggressor-state.